Any investor looking for a monthly payout should seriously consider investing in the BetaShares Dividend Harvester Active ETF (ASX: HVST) for passive income.
I’ve written before about how the Metrics Master Income Trust (ASX: MXT) is a strong monthly-paying stock. And even the Plato Income Maximiser Ltd (ASX: PL8) and its regular payments are an ASX investor’s dream. But I think HVST is a better buy for passive income. Here’s why.
Why HVST shares are a great option for passive income
HVST is an ASX-listed exchange-traded fund (ETF) that gives its investors exposure to a portfolio of 40 to 60 dividend-paying shares. The fund is constructed in a way that allows it to own a dividend share until it trades ex-dividend. At this point, the fund sells the shares and reinvests the proceeds into its next passive income-generating shares.
Its portfolio is rebalanced roughly every three months. And it targets shares that are expected to pay dividends within the next rebalance period. To improve its diversification, HVST also has exposure to the broader sharemarket exposures through an ETF. The process is referred to as ‘dividend harvesting’.
The fund’s share portfolio is typically drawn from the 100 largest ASX-listed companies and selected based on forecasts of high dividends and franking credits, based on their expected future gross dividend payments.
HVST’s portfolio allocation is weighted towards the financial sector (24.2%), with materials accounting for another 10.7%.
The fund’s top 10 holdings include Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), Wesfarmers Ltd (ASX: WES), and CSL Ltd (ASX: CSL).
How much passive income does HVST pay to its investors?
HVST provides a regular, franked dividend income that is around double the annual income yield of the broader ASX. As of the 31st of December, its 12-month gross distribution (dividend) yield is 7.4%, and the net yield is 5.8%. The franking level is 66%. The fund’s annual management fee and costs are 0.72%.
HVST has a long history of paying consistent monthly dividends to its investors. The fund paid out $0.060929 per share to investors earlier this week. Prior to this, it paid $0.0652 per share per month from August to December, up from $0.0648 paid out throughout the first half of 2025. This equates to an annual running total of $0.775729 per share fully franked.
At the time of writing on Thursday morning, HVST shares are up 0.75% to $13.51 a piece. For the year to date, the shares have climbed 0.15%.
The post Passive income investors: This ASX stock has a 7.4% dividend yield with monthly payouts appeared first on The Motley Fool Australia.
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* Returns as of 1 Jan 2026
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Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and Wesfarmers. The Motley Fool Australia has recommended BHP Group, CSL, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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